Social Entrepreneurship

Feasibility Report
Andres Nicolas Vaconez Davalos
Goh Hao Xuan Bernard
Jodi Tan Wan Loo
Nadiah Binte Mahad
G1 Team 4
Social Entrepreneurship
MGMT223/Term 2 2014/2015

Fall

08

Course Instructor: Professor Tan Wee Liang

Table of Contents
1. The Story
2. Service Feasibility..
2.1 Service Desirability
2.2 The Concept Basics
2.3 The Concept Statement
2.4 Summary of responses & Product Demand

1
2

3. Industry / Market Feasibility............... 4

3.1 Description of the Market
3.2 Attractiveness of the Industry
4. Organizational Feasibility .. 6
4.1 Management Prowess
2.1 Team Members
2.2 Resource Sufficiency
5. Financial Feasibility.... 10
5.1 Key Assumptions
5.2 Types of Grants Available
5.3 Financial Analysis
5.3.1. Revenue
5.3.2 Expenses
5.3.3 Marketing
5.4 Conclusion
Appendix....

18

References..

19

1.

The Story

Idea: Neighborhood support: lending underutilized assets to the low-income

and disposal services for offices.The idea was conceived when one of the
founders was volunteering at South Central Communitys Family Service
Centre (FSC). The FSC served the Tiong Bahru-Redhill district, an area with
a high incidence of needy families. The FSC houses social workers, attached
to such families requiring welfare, to assist with their basic needs such as
childcare, health and housing.

Once there, the founder noticed a serious and cyclical problem: the families
under welfare were consistently asking for a certain type of items: white
goods. These goods, ranging from washing machines to stoves, were
essential to the everyday functions of these families, but they did not have
the resources to buy one, nor the avenue to rent one for use. The founders
also observed that there was an active but unorganized market for secondhand white goods which might somehow complement the needs of these
families.

Our idea is to establish an active network of distribution for used white

goods that would benefit the needy and simultaneously serve an
environmentally essential function for reuse in the community.

The network could grow its traffic of incoming used goods with incentives
such as free disposal services and favorable trade-in prices. Being focused
on neighborhoods, the network has a physical presence in each
neighborhood that serves the logistical requirements of white goods intake,
transfer and distribution.

Understanding the limited purchasing power of its customers, the network

incorporates concepts from the modern gift economy to help them pay for
their needs using alternative forms of currency.

Our end goal is to arrive at a business model, aided by community and

government support that sustains the basic household needs of needy
families.

2.

Service Feasibility

2.1 Service Desirability

The appeal of the service is simple, yet profoundly essentially. We gauged
our service desirability asking ourselves the basics, crafted a concept
statement and tested it with different facets of the public.

2.2 The Concept Basics

The service is essential to a large community of people, and the need is
apparent. Aside from observing the piling requests for white goods at the

FSC, we are seeing electrical appliances having a shorter life cycle in

homes, due to their lowering costs and increasing ease of replacement. That
which is left largely unchanged, though, has been the durability and reuse
value of these white goods.

The service takes advantage of a prevailing government policy to convert

the void decks of HDB neighbourhoods into valuable community spaces. In
the Tiong Bahru-Redhill district alone, 2014 saw the conversion of 10 void
decks into retail shops for fundraising products from the Movement for the
Intellectually Disabled of Singapore (MINDS), afterschool care programs for
the Chinese Development Assistance Council (CDAC), as well as the Family
Service Centre for welfare distribution. Our service, which requires a
physical space for logistics, will greatly benefit from this relevant scheme.

The service solves two problems simultaneously: empowering low

income households to meet their basic household needs with the provision
of white goods, and reducing the wastage of disposed used appliances,
which has both economical and environmental implications for the country,
given the high living density of households and sheer turnover volume of
white goods in these homes.

A fatal pitfall of the service model is the chicken-and-egg problem: the

growth of goods supply is dependent on that of goods demand from the

community, as it is observed that there is significant inertia on both sides if

either element is not seen to be growing. This is fatal for gaining user
traction. This should be addressed with a comprehensive and consistent
expansion strategy for the service that includes growing both user
communities.

2.3 The Concept Statement

A one-page brief was crafted with intention to communicate the service
concept to the general public in a concise manner. Here are the different
facets of the general public, to whom we presented the concept statement.
1. Community leaders and social workers in CDAC, Yayasan Mendaki, National
2.
3.
4.
5.

Council of Social Service

Planning executives in Ministry of Social and Family Development(MSF)
Managers in appliance companies (Gain City, Harvey Norman, Courts)
HDB town council members
Facility management in condominiums

2.4 Summary of responses & Product Demand

Our concept statement generally went down well with members in the
community, with several critical factors to address:

1. Community leaders and social workers interviewed had a consistent

concern about accomodating the low income families ability to pay:
they have noticed that some households may be genuinely unable to
finance their payment for goods, while others take advantage of their
income classification to default on payments on purpose, without

making conscious efforts to save for such essential purchases. Our

network would need to strictly enforce timely payments from these
families and assess each customers case carefully.
2. Managers in the appliance companies were receptive towards the
idea, but are skeptical of the logistics of the shopfront, since it acts as
a proxy for these companies to store their new models for exchange.
Enough traction with the donor community is needed for this venture
to be worth the time and effort of the appliance companies. We would
have to identify the most appropriate white goods models to stock in
this storefront.
3. Executives at the HDB town councils are supportive of the idea and
that it qualifies as a void deck conversion project. They are expecting
the reach of our shopfront and how many low income families we are
intending to target. They have referred us to a unit in MSF for any
public information of low income families in the area.
Were facing warm reception from multiple members of the community, with
many caveats to account for. Our venture will take special note of these
points on growing demand for the network on both the donor and customer
groups when executing this idea.

3.

Industry/ Market Feasibility

3.1 Description of the Market

The network that we plan to create is intended to distribute reused white
goods. The main characteristic of this particular market is that the product
we are distributing can be found in almost any family or house in Singapore.
Every day, new products in the markets are bought by Singaporeans. These
leaves everyday used white goods not longer needed by the new buyers
forgotten in storage rooms or dumpsters
.
The fact is that there are many used white goods stored by people who buy
new ones and no longer need the old ones. The idea of this project is to give
a social purpose to this unused white goods. Our network intends to give a
chance to people that cant afford to buy new white goods even when they
need them, to get reused ones for an affordable price. How are we going to
this? By giving incentives and facilities to those people who buy new white
goods to recycle and think socially when they have the need of disposing
their white goods.

Because of the nature of the project, the market that we are aiming is very
broad. As everybody needs white goods the market is big enough to be
profitable. By the other hand, due to the fact that we are aiding a very
specific problem, there are no other enterprises who are involved on the
distribution of used white goods. Because of this, the market is broad

enough to make money and aid a social cause while at the same time is
specific enough to avoid competition.

3.2 Attractiveness of the Industry

Strengths in the selected market:
Because everyday people buy new white goods, the supply of the product
will keep on flowing as people need to recycle their used white goods
periodically. By other hand, because major appliance goods are a must
have for any family, there is other sector of the population that will always
need to buy the reused products offered by our network. Because of this,
there will always be supply and demand flowing in the proposed network.

In this project, the market is also attractive due to the fact that there are no
competitors in the industry with the same concept. Because of this same
reason, the market is new and is going to be attractive for potential clients.
Moreover, the market that is being aimed is narrow enough to be specific
without any competition and broad enough to be interesting and profitable.

The proposed social enterprise will not depend on a raw material which can
increase the prices. The recycling and reselling of products (and more
particularly white goods) is not common in Singapore, therefore, it is not a

crowded market. Because of this same reason, the market will keep on
expanding rather tan shrinking, which is another very valuable element for
an attractive market.

The social need that we are helping to solve has an impact on hundreds of
families all throughout Singapore. It is very complex to measure social
impact, but in this particular case, we shall keep on recycling and
distributing used white goods as long as there is someone in Singapore that
doesnt have one in their home. This social need is very specific and yet is
quite urgent to solve. Because of this, people will be interested on helping
the cause in financial matters as well as in manpower.

4.

Organizational Feasibility

To determine if our proposed business has sufficient management

expertise , organizational competence and the resources to successfully
launch, we conduct an organizational feasibility analysis, which focuses on
non-financial resources.

4.1 Management prowess

We have to understand our ability to satisfy our self with the required
passion and expertise to launch the venture. The two important factors

namely the passion of the us of the business idea and the extent to which we
understand the markets in which the venture will participate in.

Because all the founders feel for the poor, especially when 2 of our founders
are from the Tiong Bahru-Redhill district, we all have high passion for the
proposed venture. Also one of the founder also volunteers at FSC, he had
extensive relevant industry experience and mentioned stories of
experiences to the rest of the team to provide a better understanding for
the rest of the team.

In addition, being Singapore Management University (SMU)

undergraduates, all the founders went through modules such as Social
Entrepreneurship which instills a significant depth of professional
entrepreneur skills, and Creative Thinking that highly boost the creativity of
the management team members. Through cases in other modules like
Financial Accounting and Management Accounting, the team learnt relevant
experience and expertise in cash flow management.

4.2 Team Members

One of our members, Bernard, would be in the finance department
managing cash flows for our venture. He has knowledge and experiences in

this aspect and would be able to benefit the company in the accounting
area, with minimal discrepancies. He would also be in charge of sourcing
for partnerships for the companies, for appliance sources, i.e. Audio House,
Best Denki, Courts. The partnerships will help to provide a continual supply
of new white goods for the general public.

Jodi will be in charge of hiring and volunteer management. Hiring would be

in terms of the 2 full time staff, which will be the delivery personnel and an
assistant, to facilitate the administrative issues for the company. She has
strong interpersonal skills and have a passion to work with people. Also, her
engagements in overseas community service projects made her better
understand how the volunteer- sourcing works. Therefore, she will source
for volunteers for repairing of the household items when the goods are
gathered in the store. The sourcing will be from various ITE colleges in
Singapore. Also, she also assists Nadiah in managing the social platforms,
to keep a lookout for potential volunteers and sponsors.

Nadiah will be in charge of marketing and public relations activities. She

will be also attending to queries and updating the companys website and
through social media platforms, Facebook and Twitter. Her relevant intern
experience at PRecious Communications as a Marketing Executive will
benefit the company as she generates new ideas to sell our idea to the
general public.

Andre warehouse assistant and white goods delivery supervisor. Given his
part time work experience in the operations department in his family
business previously, knowing the process and operations involved in
handling household appliances would ensure that goods are handled in best
way possible for our beneficiaries. He will also lead the delivery team and
oversees the logistics process. His 3 years driving experience also place him
the best person to drive around Singapore the communities. As he is a
friendly and stern person, he would be able to lead the logistics team with
his relevant soft and hard skills.

4.3 Resource Sufficiency

Below we discuss if there is sufficient non financial resources to launch the
proposed venture.

Firstly, the venture will require additional facilities like a space in the void
deck which we will convert into a store, to keep and sell the white goods in
the community and for future deliveries to needy families. We will file an
application for the facility from National Council of Social Service (NSCC).
NCSS engages potential landlords to offer Community and sports Facilities
Scheme (CSFS) space to us for supported social service, (National Council
of Social Service, 2014).

Also, the venture would require 2 to 3 delivery vehicles to carry out

delivering purposes to the beneficiaries. However, we can just start with 1
delivery vehicle and when the supply and demand grows bigger, we can
acquire more delivery vehicles. A second-hand 10-feet truck - Toyota Dyna
150 will be used for deliveries. The estimated cost of one is $65,800 with a
5 year residual life (SGcarmart, 2014).

Next, the company would set up a home website, providing information and
keep a close relationship with our potential suppliers and customers. Also,
to contact our potential suppliers and beneficiaries, we must first reach out
to the neighbourhood through posters at the vicinity and through social
media platforms to promote and build awareness of our offerings. Being
experts at social media platforms such as Twitter and Facebook, the
founders would have the necessary ability to form favourable business
partnerships, and to contact stakeholders. It is also through these platforms
that we are in strong proximity to suppliers and customers. Any updates on
the company will be updated online and attended by our marketing and
Public Relations Manager, Nadiah.

Then, we need key management employees and key support personnel. For
the venture to work out, we need a dedicated team of volunteers and part
time drivers to join the firm. One founder, Andre, will be leading the team to
make deliveries. His 3 years of driving puts him as the best person to lead

the team. There must be a high willingness of high quality employees to join
us in the venture and to sustain it. The venture will require 2 other
volunteer staff, which will handle deliveries and assisting activities for
Andre.

The semi-spoilt or used white goods would have to be repaired by our

technical team. We currently have a senior volunteer who has been doing
handiworks for going 25years, mostly repairs of electric household
appliances. Other than him, Jodi will put up notifications for sourcing for
volunteers or interns with relevant experience and accreditations. Some
avenues could be to ITE students, in engineering or electrical technology
courses. The interns can be paid a minimal allowance, and with the
company under a 3 to 6 months contract. Under this working contract, they
would just need to report for work twice to thrice a week, and can go back
when the semi-spoilt white goods are repaired.

5.
5.1 Key Assumptions

Financial Feasibility

During the preparation of the projected financial statement of our social

enterprise, several key assumptions were established, as listed below:

1.

Profits and losses are indicated before tax, with tax exemption based on
IRAS requirements for the first 3 years

2.

Revenue collected are paid in cash, with no receivables recorded

3.

Currency of all figures stated are in SGD, unless otherwise stated

Total start-up cash needed - Cash Flow & Financial Analysis

In order to start the venture, we would require $76,000 as start-up capital.
We plan to raise the needed capital through personal contributions by the
founders of $10,000 in total. Additionally, we aim to secure $50,000
(through second grant) through various grants and the remainder $16,000
through donors supporting our venture.

5.2 Types of Grants Available

We have taken into account a few grants into consideration before setting
up this venture.
For SMU IIE Ace Starup Grant, ACE will match $7 to ever $3 raised by the
entrepreneurer for up to $50,000 (2014, iiesmu.edu.sg). For an applicant to
raise $50,000, applicant will be required to raise $21,429 for co-matching.

In SPRING Singapore Young Entrepreneurs Scheme for Startup, SPRING

matches $4 for every $1 raised through self-funding for up to $50,000
(2014, spring.gov.sg). For an applicant to raise $50,000, applicant will be
required to raise $10,000 investment.

5.3 Financial Analysis

The figure above depicts the profit and loss made by the venture for the first
5 years of operation, including reasonable approximations of the relevant
revenues and expenses.

Using the reverse income statement method, we deduced that the revenue
needed amounts to $20 per transaction made. Following which, we
projected the number of transactions needed and came up with financial
statements to estimate the year that the venture will breakeven and the
amount of profits per year.

Based on the figure above, we observe that the amount of profits increases
with each year, and the point of breakeven is reached after 3 years of
operations. This is based on the projections that the number of transactions
made will increase by 100 each year.

5.3.1 Revenue
Transaction Fees
Based on the transaction fee of $20, we obtained the following figures for
the revenue amounts:

Year
Year
Year
Year
Year

1:
2:
3:
4:
5:

600*$20=$12 000
700*$20=$14 000
800*$20=$16 000
900*$20=$18 000
1 000*$20=$20 000

The revenues are obtained through projections on the number of

transactions made per year, with 100 transactions additional for each year
of operation.

5.3.2 Expenses
Website Development & Server Costs
Based on past experience and several quotations we received, we were able
to estimate the cost of the website development to be around $3 000, if we
were to engage a freelance website designer and developer. This is based
on a typical and simple website design, which does not require significant
personalisations (i.e. adding forms, tailoring auto-responses etc.). The
website will be used as a channel for promotion of the service to our target
beneficiaries and people who are willing to sell their white goods.

Additionally, we wish to host the website on our own domain. Website

hosting fees typically range from $40-$80. We would be taking up the
services of APC Hosting Pte Ltd, which is based in Singapore, and charges
$60 per month for website hosting. Choosing this company would be
advantageous to us as we will be able to enjoy a reasonable fee for the

service and be provided with timely updates and support, should we face
any difficulties with our website.

Storage Space
As mentioned, we would be taking up spaces in the void decks of the
Redhill-Tiong Bahru area. These will be converted into our store where
people will be able to come and sell their white goods to others in the
community. We hope to be able to secure a (decent area) as storage and
store space at $1000 a month. As we anticipate demand for the white goods
to be high, we would not be taking in items that are not needed by the
community and which will take up excessive space in the store area. To
reduce the need for a big space, we hope to be able to achieve quick selling
times and turnaround for delivery of the white goods.

Delivery Associated Costs

As part of our service, we wish to provide delivery services for the white
goods (i.e. picking up items being sold and delivering items to the
community). In order to carry this out, we will be purchasing a secondhand truck, which is estimated to cost $65 800 and has a 5 year residual
life. Based on the projected number of transactions we hope to make each
month, we hope to be able to achieve quick delivery times and maximum
use of the truck for the first 5 years of operations. Following which, a

subsequent projection will need to be made and we could decide on whether

to purchase more trucks for use.

Additionally, we factored in other costs, such as diesel costs and parking

charges, amounting to approximately $400 per month (this is based on
constant costs of diesel fuel for the next 5 years).

Salary of Full Time Staff

We have made the decision to not distribute salary for the founders of the
venture, who hope to be able to secure other sources of income through
other means (i.e. jobs or other ventures). As such, to support the founding
team with the running of key day-to-day activities, 2 full time staff will be
hired (i.e. delivery and admin support staff and business development) to
head key roles. The salaries of these individuals amount to $5 000 in total
per month.

5.3.3 Marketing
In order to attract people to sell their white goods and to raise awareness of
our service amongst the community, we have allocated $100 a month in
marketing budget. We hope to be able to harness the power of social
media, combined with the efforts of word of mouth promotion and
distribution of flyers to increase traffic to our website and store. Keeping

our budget for marketing low, we aim to make use of online channels and
public relations strategies to boost awareness of our venture.

5.4 Conclusion
Based on our financial feasibility analysis, we conclude that this venture is
financially feasible as we are able to achieve breakeven after 4 years of
operations, with steady growth in revenue over the years. Through
research and experience, we have estimated the revenue and expenses
amount with a reasonable degree of certainty (barring any major
catastrophic events).

Appendix i- Concept Statement

Product
Goodgiving is an active network of distribution for used white goods that
aims to benefit the financially needy and serve an environmental function
for reuse in the community. Founded to serve the needs of the low income
families in the Redhill-Tiong Bahru neighbourhoods, the network consists of
a shopfront that is fashioned out of unused void deck space, a network of
volunteers to refurbish and maintain used white goods and a logistics
system that distributes these goods.

Target Market
Goodgiving serves two primary stakeholders: the community-at-large that
disposes of used white goods with the network and the low income families
in the Redhill-Tiong Bahru neighbourhood. The former provides used white
goods, with an incentive to pay lesser for a new washing machine provided
by our partners, appliance store giant Gain city.

Why Goodgiving
The used white goods market in affluent neighbourhoods grew in Singapore
by 10% from 2010, with majority of the customers being middle to lowincome buyers. We believe that by extending this to low-income families in

targeted neighbourhoods, we can achieve two benefits for the community:

one for meeting a dire need for low income communities to afford white
goods in a sustainable way, and to improve the flow of used goods into the
recycling community.

The team behind Goodgiving

The team is founded by three graduates of SMU, Jodi Tan, Bernard Goh and
Nadiah Mahad, all who have previously worked in the Family Service
Centre in the Redhill-Tiong Bahru district. They were working with low
income families requiring welfare when they noticed the sheer demand for
used white goods, such as washing machines & refrigerators, for their
everyday needs. Bernard chanced upon a meeting with an executive at Gain
City who mentioned the companys intention to enter the used white goods
market. Jodi did some research with the Tiong Bahru Town Council and
found out about the void deck conversion program, and the team decided to
synthesise both ideas for this venture. Jodi manages relations with the
community leaders of the residential area, Bernard runs logistics and
operations of the venture, while Nadiah heads the relations with our
commercial partner Gain City.

References

ACE Start-Ups Grants. (n.d.). Retrieved April 4, 2015, from

http://iie.smu.edu.sg/functions/incubation/ace-start-ups-grants

(n.d.). Retrieved April 4, 2015, from

http://www.spring.gov.sg/Entrepreneurship/FSP/Pages/youngentrepreneurs-scheme-schools.aspx#.UoMesECon-sNational Council of
Social Service, 2014, (n.d.).

Retrieved April 4, 2015, from

https://www.ncss.gov.sg/VWOcorner/bs_csfs.asp

Buy Used Car & Used Vehicle & Used Cars Singapore - sgCarMart. (n.d.).
Retrieved April 4, 2015, from
http://www.sgcarmart.com/used_cars/listing.php?RGD=2010&MOD=Toyota
Dyna&RPG=20